The deadline to file under the old bankruptcy laws has come and gone. Thousands of debtors lined up at the federal courts to make last minute filings while many of us were on Pacer for electronic filings. Now we wait and see how the Bankrutpcy Abuse Prevention and Consumer Protection Act of 2005 will take control and lead us into the future of bankruptcy.

John Caher of the New York Law Journal writes, "A minefield of new obligations, responsibilities and liabilities awaits bankruptcy attorneys this week as a controversial law directly impacts the attorney-client relationship, warn practitioners, academics and bar groups."

Corinne Cooper, professor emerita from the University of Missouri, and an authority on the implications of the new law for attorneys, says "The bill is exceedingly poorly drafted, so even if you think you might understand what you might be obligated to do under it, it is not clear at all. And the penalties for not understanding exactly what you should be doing are extremely strict."

The liability provisions for attorneys included in the new bill provide: 1) Personal liability for the accuracy of their clients' filings; 2) Certify that the debtor has the ability to make payments under a reaffirmation agreement. If the attorney guesses wrong, he or she could be forced to pay the creditor whatever the debtors owes; and 3) Identify themselves, and advertise themselves, as "debt relief agencies" [relief agency if he or she: provides "bankrutpcy assistance;" to an "assisted person" (a consumer with nonexempt property worth less than $150,000); for "the payment of money or other valuable consideration, or is a bankruptcy petition preparer."] Under the new law, as a debt relief agency, an attorney is required (see ?527) to advise clients that a lawyer may not be necessary and they can represent themselves or work with a document preparer which now is not good advice as the new process is so incredibly complex, and the slightest infraction will result in the dismissal of the case. Some attorneys may feel strongly discouraged to offer their services pro bono to people victimized by a natural disaster, such as Hurricane Katrina.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has kicked in obliterating a generation of precedent in bankruptcy law. Although the effect on debtors has been well publicized, resulting in a surge in filing in recent weeks as savvy debtors filed ahead of the deadline, the repercussions for attorney and their practice is at least as dramatic, experts say.........

You can read the full article at http://www.law.com/jsp/article.jsp?id=1129280709784 (Full article)

Mike